The Dekagram: 3rd November 2025

In this week’s dekagram Dominique Smith examines the all-important topic of Part 36 offers, and the knotty question of whether and how they can be withdrawn, whilst Russell Wilcox considers what currency costs orders should be made in.

When can a Part 36 Offer be Withdrawn? Chinda v Cardiff & Vale University Health Board

Last week the High Court delivered judgment in the case of Chinda v Cardiff & Vale University Health Board [2025] EWHC 2692 (KB), whereby an application to withdraw a Part 36 offer by a Claimant, which had been accepted by the Defendant within the relevant period, was considered.

Background

The Claimant brought a claim in relation to a delay in diagnosis of his spinal tuberculosis, which resulted in him sustaining a neurological injury. The Defendant admitted a breach of duty of care in failing to arrange MRI scanning when the Claimant attended its emergency department. The Claimant had been rendered essentially paraplegic as a result of his injuries. He could not walk or stand and had no movement in both legs. He was wheelchair bound. He suffered from significant neuropathic pain, paraesthesia and burning sensations in his back and lower limbs. He also suffered from bladder, bowel and sexual dysfunction.

A Letter of Claim had been sent to the Defendant in March 2022, with an early admission of breach of duty being received in the Defendant’s Letter of Response in November 2022. Proceedings were issued in March 2023. In their Defence, the Defendant not only repeated the admission of breach of duty from their Letter of Response but made further admissions in respect of causation. Consequently, judgment was entered for the Claimant for quantum to be assessed.

Following a round table meeting between the parties, the Claimant’s solicitors made a Part 36 offer on 2^nd July 2025 which included a retained lump sum, a variable periodical payments order, and an order for provisional damages. By 8^th July 2025, the Claimant’s solicitor wrote to the Defendant to put them on notice that the Claimant wished to withdraw the offer. However, the offer was accepted by the Defendant on 22^nd July 2025 (i.e., within the relevant period). The Claimant subsequently made an application to the Court to withdraw the offer.

The application

The application came before Senior Master Cook. When looking at CPR 36.10(3), the Claimant had to satisfy the Court that there had been a change of circumstances since making the original offer and that it was in the interests of justice to give permission for the offer to be withdrawn. During his oral submissions, the Claimant’s counsel placed considerable emphasis on the Claimant’s status as a vulnerable party and the need for the Court to take that into account when considering the application. He referred to the Claimant’s witness statement in support of the application, which noted that the Claimant had found the day on which the round table meeting was held to be overwhelming and exhausting, and that he had changed his mind following the meeting.

Master Cook noted that, at all times, the Claimant was represented by specialist personal injury solicitors who should be presumed to be aware of his difficulties. As such, if there had been any such real concern on their part, Master Cook considered that he would have expected them to raise the issue or to ensure that their client had sufficient space in which to give his instructions. The Court reminded the parties that CPR Part 36 is a self-contained code which contains a highly prescriptive set of rules. The Claimant did not lack capacity and the offer was made by solicitors acting on his behalf. Master Cook accepted the Defendant’s submissions that whilst there had been a change of mind by the Claimant, that did not amount to a change of circumstances for the purposes of CPR r36.10(3). Consequently, permission to withdraw the offer was denied.

Analysis

The result of the application is somewhat unsurprising, given the rigidity of the rules contained within CPR Part 36. It was however interesting to see how the Court grappled with a party’s vulnerability in respect of such an application. It is of note to all practitioners that Master Cook considered that certainty and predictability is of “vital importance” when applying the provisions of CPR Part 36, and that to hold that a change of mind amounted to change of circumstances “would be to introduce an unacceptable degree of uncertainty into what should be a certain process”.

About the author

Ranked by the Legal 500 2021, 2022 and 2023 and by Chambers and Partners 2023 as a Rising Star, Dominique Smith was called in 2016 and has a busy practice in travel law. She undertakes work for both Claimants and Defendants in package travel claims, contractual disputes, and other related claims. Dominique has a particular interest in cross-border clinical negligence claims and regularly appears in the Coroners’ Courts.

Costs and Currency: The Supreme Court Has its Say

In the recent case of Process & Industrial Developments Limited v The Federal Republic of Nigeria [2025] UKSC 36, the Supreme Court was tasked with considering the question of costs orders in the context of the enforcement of international arbitral awards in the courts of England and Wales.

The dispute arose out of enforcement proceedings in respect of two arbitral awards made in 2015 and 2017 against Nigeria totalling US $6.6 billion plus interest. Those awards had themselves been made in relation to a dispute over the breakdown of a contract for the construction of a gas processing facility. 

Enforcement was initiated in 2018 by P&ID in the Commercial Court in London where Nigeria mounted a vigorous, and ultimately successful, action which sought to challenge the awards on the basis of fraud and contravention of public policy. The consequent trial which resulted in the awards being set aside lasted eight weeks and caused Nigeria to incur costs in the amount of £44.127 million. The question for the Supreme Court, as it was for the Court of Appeal below, was whether or not Knowles J was correct to have awarded Nigeria’s costs in pounds sterling rather than in Nigerian Naira.

As the Supreme Court set out at paragraph 3 of its judgment:

“The reason why P&ID seeks to have the award of costs against them denominated in naira is that for several years, and particularly since Nigeria ceased to peg its currency to the US dollar in 2023, the naira has fallen markedly against other currencies including sterling. P&ID submits that if Nigeria were to receive an award of costs in sterling it would gain a substantial windfall at its expense because the sterling sums which Nigeria paid to its solicitors were the equivalent of approximately 25 billion naira when they were paid whereas they are now the equivalent of 95 billion naira.”

P&ID cited in support of its argument, that a court should award the costs in the currency which most accurately reflects the losses suffered by the receiving party in funding its litigation, the case of Cathay Pacific Airlines Ltd v Lufthansa Technik AG [2019] EWHC 715 (Ch); [2019] 1 WLR 5057 (“Cathay Pacific”).

At first instance, Knowles J. proceeded on the understanding that Nigeria had been charged its legal fees in sterling, and that it had met those fees by making payment in sterling, having first converted the relevant amounts from naira. In making the award of costs to Nigeria, his reasoning was simple: namely, that the costs had been incurred, charged and paid in sterling, therefore they should be awarded in sterling.

The Court of Appeal upheld the order of Knowles J. In so doing, it ruled (para 58) that the purpose of costs awards is not to indemnify a receiving party against loss:

“Rather, an award of costs is a statutory indemnity against the liability that the receiving party has incurred to his own lawyers”

There was no basis, therefore, for the contention that the court was required to conduct an inquiry into the currency best reflecting the underlying loss of the receiving party (para 63).

 Before the Supreme Court, P&ID sought, among other things, to challenge the Court of Appeal’s distinction between an indemnity designed to compensate against loss and an indemnity against the liability that the receiving party has incurred to its own lawyers, arguing that such was a distinction without any material difference. 

The Supreme Court unanimously rejected P&ID’s appeal. It did so on a number of grounds.

First, it emphasised that the purpose of costs orders is not the same as damages awards in contract and tort. The purpose of damages awards is to compensate for specific, ascertainable, losses. The purpose of costs orders, in contrast, is to provide a reasonable contribution towards legal expenses:

“15. Thus, while, at a high level of generality, the award of costs may be seen as a statutory indemnity because a party cannot recover more in costs than has been paid in fees and disbursements on the litigation (see Harold v Smith (1860) 5 H & N 381, 385 per Bramwell B), such an award is not an attempt to restore a party to the position it would have been in if it had not had to litigate to assert its rights. The indemnity principle simply prevents a party from recovering in an award of costs sums for which it has not incurred a liability to its own lawyers.

16. The task of the court making a costs award is to identify the reasonable amount which the party ordered to pay costs should pay, which is not the same as the sums which the receiving party has paid its lawyers and excludes the costs of funding the litigation, such as the cost of borrowing or the sums paid to commercial litigation funders. As Purchas LJ stated in Hunt v R M Douglas (Roofing) Ltd (18 November 1987, The Times, 23 November 1987) the expression “legal costs” has “a restricted meaning which could almost be described as conventional in a certain pragmatic sense”. An award of costs is no indemnity. It is a statutorily authorised award of a contribution toward the costs incurred in litigating in the courts of England and Wales.”

Secondly, cost orders are discretionary. Cost orders are not addressing the question of loss, to which a party has an entitlement:

“… nobody has an entitlement to an award of costs as of right. The award of costs is a component of the court process itself. The court has a discretion to award costs as section 51 of the 1981 Act states. The court is not addressing loss.”

Thirdly, courts typically do not and should not investigate the intricate details of how a litigant funds their legal representation:

“…there is no distinction in principle between a person, who in order to pay a solicitor’s invoice expressed in sterling, converts another currency into sterling, and a person who sells gold or valuable paintings to do so. The court in awarding costs will usually have no idea of the arrangements by which the litigant has obtained the funds to meet its liability to its solicitors and does not investigate those arrangements in order to ascertain that party’s loss”

Fourthly, mandating detailed investigation into litigation funding would likely lead to additional collateral litigation which is undesirable and would quickly become disproportionate:

“20….there are pragmatic reasons why the court should not inquire into how the litigant has funded an action. The overriding objective of enabling the court to deal with cases justly and at a proportionate cost extends to the court’s handling of disputes as to costs. If the court had to inquire into how a litigant had funded the sums which it paid to its lawyers, there would be a risk of collateral disputes of fact which might necessitate a separate trial. Notwithstanding the large sums that Nigeria has incurred in successfully challenging the arbitral awards in this case, the court should be very slow to adopt a principle which would encourage disproportionate or expensive satellite litigation.”

In its concluding observations, whilst the Court noted that there is no strict legal requirement that in every case  costs orders be made in sterling or the currency in which a client is billed, it did recognise that to be the general rule:

“25. It is consistent with the nature of the court’s costs jurisdiction and with legal certainty that there be a general rule that an order for costs should be made in sterling or in the currency in which the solicitor has billed the client and in which the client has paid or there is a liability to pay. That reflects the liability which the party has incurred by litigating in the English courts. There may, nonetheless, be circumstances in which the court chooses not to award costs in the currency in which the receiving party has paid its lawyers. If the court considers that the parties’ choice of the currency of payment is abusive or otherwise inappropriate, the court could properly make the costs order in sterling notwithstanding the party’s use of that other currency.”

This recognition of the importance of consistency, whilst nested within the court’s overriding discretion, and the concern to avoid endless collateral sub-disputes brings clarity to an important area of international litigation.

About the Author

Dr Russell Wilcox was called to the Bar in 2000, and before joining chambers enjoyed an illustrious career in academia. He was an associate member of McNair Chambers in Qatar, where he worked on a number of large-scale cross-jurisdictional commercial disputes and on international arbitral proceedings, and acted as disclosure counsel in Athenasios Sophocleus & Others v Secretaries of State for Foreign and Commonwealth Affairs and Defence, relating to the actions of the Colonial Administration in Cyprus during the Cyprus Emergency of 1956 to 1959. He now accepts the full range of work undertaken by the travel team at Deka Chambers.